Irish Examiner – €3.7bn — The hidden price of alcohol

The Government should “seriously consider” raising taxes on alcohol to reduce the estimated €3.7 billion cost to the state from alcohol abuse, according to a HSE report on the issue.

The research also goes on to suggest that the alcohol industry had, until recently, “exercised undue influence on government policy”.

The report comes as provisional figures indicate that alcohol consumption levels in Ireland actually increased last year for the first time since 2007.

Alcohol Action Ireland has welcomed the report and said the Government should either introduce minimum pricing for alcohol or increase excise duty.

But the Alcohol Beverage Federation of Ireland, which represents manufacturers and suppliers, said there was “no evidence” to suggest increasing the excise duty on alcohol was an effective way of dealing with misuse of alcohol, adding that such a move would penalise the average, responsible drinker.

The report, entitled Costs to Society of Problem Alcohol Use in Ireland, was carried out for the HSE by Sean Byrne, a lecturer in economics at the Dublin Institute of Technology.

The study states that the estimated cost of alcohol abuse to Irish society, based on 2007 data, amounted to €3.7bn, up from €2.6bn in 2003.

It said this represented 1.9% of gross domestic product in 2007, while international research estimated that the average cost in the European Union was 1.3%.

The cost of alcohol abuse to the Irish health system amounts to €1.2bn – approximately 8% of the total health budget, both in 2007 and 2011.

The total crime-related costs are €1.19bn. Some €319 million of this is directly incurred by the criminal justice system – representing 13% of the justice budget, both in 2007 and 2011.

The report states that while the nominal price of alcohol has increased significantly in the past 15 years, the real price, adjusted to include changes in income, has fallen by 50% since the mid-1990s.

It states that while Ireland has relatively high nominal excise duties on alcohol, the real value has fallen steeply.

“The decline in the real price of alcohol in Ireland has resulted in alcohol becoming significantly more affordable, particularly for young people, which, in turn, has led to the very alarming increase in consumption from 1990 to the present,” the report says.

“There is considerable evidence that increasing the price of alcohol reduces alcohol-related harms and the government should seriously consider raising the rate of excise duty on alcohol as a means of reducing harms.”

The report claims that “the alcohol industry has until recently represented a disproportional share of output and employment and has therefore exercised undue influence on government policy”.

It states that some countries, such as Canada, had introduced minimum pricing for alcohol and others, like Scotland, were considering it.

Alcohol Action Ireland’s Fiona Ryan said: “If you want to reduce alcohol-related costs, you have to reduce the harm and to do that you have to reduce the consumption and one of the most effective ways of doing that is through pricing.”

She said the report comes as provisional data shows alcohol consumption rose from 11.3 litres per adult in 2009 to 11.9 in 2010, the first increase since 2007.

This appeared in the printed version of the Irish Examiner Thursday, August 25, 2011

Source: Irish Examiner – 25/08/11
Journalist: Cormac O’Keeffe